If, as we've seen hints of in the run-up to a formal enactment on tariffs, the markets take a nosedive, so will Trump's bragging rights on that score and a whole lot of his rich donors/supporters will lose a whole lot of money.
In the past week, three critical stories gained steam, any one of which could pose a threat to President Donald Trump’s tenure. In the same week, we’ve seen Gary Cohn’s resignation over the tariff decision; a slew of Jared Kushner scandals; and the Stormy Daniels lawsuit concerning $130,000 to hush up a purported affair.
Trump’s decision to press forward on tariffs has created a firestorm on the right and driven a wedge like no other issue has between Trump and the GOP-led Congress. Why is this such a big deal? Republicans think, understandably, that their only chance of survival is a healthy economy, and getting credit for it by virtue of the tax bill. If, as we’ve seen hints of in the run-up to a formal enactment, the markets take a nosedive, so will Trump’s bragging rights on that score and a whole lot of his rich donors/supporters will lose a whole lot of money. For ideologically minded GOP donors, such as the Koch brothers, tariffs are as bad as a tax hike – in fact, they are a tax hike on consumers. Trump and Republicans now risk losing credit for a healthy economy that they essentially inherited – and getting blamed for a rocky patch, in an election year.
The fundamental bargain between Trump and congressional Republicans was that the latter would defend him, no matter how distasteful his conduct, so long as he helped get them their dream economic agenda. That nearly collapsed last year when Obamacare reform failed. However, the pact was restored and strengthened with the passage of tax reform. Now, it may be irreparably harmed – with disastrous results for House and Senate Republicans in the midterms and for Trump, who certainly needs Republicans to keep supporting him through the Russia probe and related investigations.
The tariff decision morphed into an even bigger deal when Cohn decided to leave. Sarah Huckabee Sanders denied in Wednesday’s news conference that anything was amiss (“This is an intense place, as is every White House, and it’s not abnormal that you would have people come and go”), but the personnel turnover is unprecedented, as is the president’s unpredictability. Without Cohn, the thinking goes, there will be less reason for many people to stay and less adult supervision of Trump.
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In short, a damaged economy and market panic about the administration’s stability will remove one of the few positive talking points for GOP incumbents and might finally wean a segment of Trump’s base away from him (depending on the severity of any economic downturn).
The second disturbing development for Trump is the growing financial scandal(s) hanging over Kushner’s head. His security clearance was downgraded, setting off much interest in his financial situation. He was already known to be deeply in debt, filed multiple corrections to his financial disclosure form and met with the CEO of a Russian bank under U.S. sanctions. But there is much, much more.
Ethics experts Fred Wertheimer, Norman L. Eisen and Virginia Canter write on Kushner’s White House meetings with representatives of two financial firms, Apollo Global Management and Citigroup, before receiving massive loans. That’s an ethics thicket that may go beyond the appearance of a conflict of interest. “That will depend on the details of the discussions that took place between Kushner and [Apollo executive Joshua] Harris, and the benefits Harris and Apollo may have received,” they write. “The possible violations here are many. For example, according to ABC News, six weeks after Apollo extended its loan, the Securities and Exchange Commission dropped an inquiry into the private investment fund. ABC said, ‘While there’s no evidence that Kushner or any other Trump administration official had a role in the agency’s decision to drop the inquiry into Apollo Global Management, the timing has once again raised potential conflict-of-interest questions about Kushner’s family business and his role as an adviser to his father-in-law, President Donald Trump.’ “
Kushner is now caught up in two other financial controversies. The first involves Qatar. (“Kushner also has an apparent or perhaps even an actual conflict with respect to matters involving that country, in part because it is one of Apollo’s largest investors in its real estate trust. Qatar was also considered a prospective investor for the Kushner family property at 666 Fifth Ave. in New York, which has a $1.2 billion mortgage loan due early next year.”) Kushner should have recused himself from matters dealing with Qatar but instead played a role “in determining a US response to the blockade of Qatar by its Saudi and United Arab Emirates neighbors . . . only a month after the Kushner Cos. unsuccessfully solicited funding from the Qatar finance minister for the 666 Fifth Ave. property.” The second concerns a report that four foreign governments were aware of Kushner’s financial problems and may have attempted to exploit his finances in dealings with Kushner. One is left with the sinking feeling that any Kushner meeting with a foreign government or a financial institution may involve improper influence-peddling and conflicts. Perhaps he should stay home for the foreseeable future.
Daniels’ lawsuit seeking to void an agreement silencing her in exchange for $130,000 is now a topic of much questioning in the White House press room. Sanders declared without explanation, “The president has denied the allegations against him and, again, this case has already been won in arbitration.” But what about the lawsuit alleging that she was coerced by Michael Cohen and Trump into signing a false statement? As for the hush money and whether Trump knew about the payment, Sanders could only say, “Not that I’m aware of.” That’s the classic non-denial denial.
The lawsuit is not just embarrassing; the payment, if known to Trump and designed to preserve his presidential campaign, as Daniels alleges, may have violated several laws. For starters, it was never reported in financial disclosure statements. Eisen, Noah Bookbinder and Richard Painter have filed a claim with the Office of Government Ethics alleging that Trump should have identified the agreement in his financial disclosure statement filed in June 2017. Eisen tells me, “Certainly there is a very substantial potential campaign finance violation here. But as more and more information comes out about the actual transaction with Stormy, there is also a significant possible omission on the president’s financial disclosure forms … Those forms require disclosure of all the president’s assets and liabilities.” He asserts that “we cannot help but ask whether he intentionally omitted information about his interest in the Stormy Daniels agreement and the LLC that holds it – an apparent asset.” Because that disclosure is filed under penalty of perjury, Eisen has also filed a complaint with the Justice Department.
Meanwhile, Common Cause has filed a claim with the Federal Election Commission alleging that the deal was a campaign contribution. If Cohen paid it all by himself, it’s above the legal limit; if Trump ultimately paid it, he failed to disclose it. Eisen and Painter explain:
“If Trump has an outstanding debt to Cohen for the $130,000 payment, or an interest in the LLC that holds the agreement, he should have disclosed them; our watchdog group has filed a complaint with the Office of Government Ethics asking them to get to the bottom of the matter. Such omissions – if any – would have been disqualifying in the White Houses in which we worked, and no clearances would have been forthcoming while any question remained open.
“And that is just the tip of the iceberg. There are literally hundreds of other issues. Take Trump’s web of financial dealings that exposes him to influence by foreign governments, sovereign wealth funds and banks controlled by foreign governments. His extensive business activities in foreign countries including Canada, China, the Dominican Republic, India, Indonesia, Ireland, Mexico, Panama, Peru, the Philippines, Scotland, St. Martin, the United Arab Emirates, Uruguay and Venezuela have already yielded conflicts or potential conflicts.”
In sum, between tariffs/Cohn’s departure, Kushner’s financial issues and Daniels’ lawsuit, Trump seems to be under siege from all directions. It would be ironic if some combination of all these issues, and not special counsel Robert Mueller per se, spelled the end of his presidency.